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U.S. home prices rose for a second consecutive month in May, rising by a seasonally adjusted 0.4 percent, the Federal Housing Finance Agency (FHFA) announced today.

The news raises hopes that the housing market might be finding its footing after 10 straight monthly declines, but the news wasn’t all good. April’s previously announced 0.8 percent gain was downsized to 0.2 percent, meaning that current prices appear to be a bit lower than they were a month ago (initial price estimates are often revised the following month).   On an annual basis, the FHFA’s national home price index is down an estimated 6.3 percent from May 2010 and has fallen 19.6 percent from its high point in April 2007. U.S. home prices have now returned to roughly their January 2004 level, although there is considerable variation among individual local housing markets.   The Mountain region showed the strongest monthly price gain of the nine U.S. Census regions for which figures were reported, posting a seasonally adjusted 2.0 percent increase compared to April’s figures and recovering most of a 2.1 percent drop the previous month. Strong monthly price increases were also seen in the East South Central, West North Central and South Atlantic states, which were up 1.3 percent, 1.0 percent and 0.9 percent, respectively.   Declining monthly prices were reported for only two of the nine regions, with the West South Central and Middle Atlantic states down 1.0 percent and 0.8 percent, respectively.   All nine regions showed declining home prices on an annual basis, with the New England states holding their value the best, with only a 2.6 percent decline over the past 12 months. The West South Central and Middle Atlantic states followed with declines of 3.4 percent and 3.9 percent, respectively.   The Pacific and Mountain states showed the biggest price annual price declines in the current report, with prices down 9.9 percent and 9.2 percent since May 2010. They were followed by the South Atlantic region, with a 7.7 percent annual decline in home prices.

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